What is the defect liability period?
The defect liability period is the stretch after completion during which the contractor must make good defects at its own cost, and it is the clock that decides when the second half of retention is released.
Also called DLP, defects liability period.
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Defect liability period in plain words
Completion does not end the contract. For a defined period afterwards, usually a year, the contractor stays responsible for defects that appear. Only at the end of it does the remaining retention or security deposit fall due.
Why does defect liability period matter?
It is the release trigger for the largest block of trapped cash on a finished project, and the only one nobody is watching, because the project team has moved to the next job.
Where does defect liability period mislead?
The period runs from a certificate, not from a date in a plan. Where the completion certificate is issued late, the defect liability period starts late and the retention release moves with it, which is a delay the contractor pays for and did not cause.
What do people get wrong about defect liability period?
- Dating it from practical completion when the contract says otherwise
- CPWD conditions tie the security deposit refund to the later of the completion certificate and the final bill being passed. Assuming the earlier date produces a chase letter that is refused.
- Closing the project file at handover
- The DLP outlives the site team by a year or more. If nothing owns the release, it is found during an audit rather than collected on time.
How does Crestline measure defect liability period?
Crestline ages retention from the completion certificate and flags holdings whose defect liability period has expired with no claim raised, which is the moment the money is simply owed.
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